Honda Withdraws Annual Guidance; Q2 Profit Tanks

By IBT Staff Reporter On 10/31/11 AT 3:21 AM

Visitors are silhouetted against a Logo of the Honda Motor at the company showroom in Tokyo October 31, 2011. Photo: REUTERS

Honda Motor Co <7267.T> withdrew its annual earnings guidance in an unusual move on Monday due to uncertainties including currency markets and Thailand's floods just as it was starting to recover from the March earthquake and tsunami.

Honda has been hit the hardest of any of Japan's automakers by both disasters this year, recovering slowly from the supply disruption in northeast Japan and suffering direct damage at its Thai car factory in the Ayutthaya industrial estate.

For the July-September second quarter, Japan's third-biggest automaker posted a 68 percent drop in operating profit to 52.51 billion yen ($693 million) due mainly to a shortage of microchip controllers from quake-hit Renesas Electronics Corp <6723.T>. That was worse than the consensus estimate of 63.5 billion yen in a Reuters survey of 13 analysts.

Net profit, which includes earnings in China, fell 55.5 percent to 60.43 billion yen, also hammered by a sharp rise in the yen.

Honda, also the world's top motorcycle maker, had previously forecast operating profit of 270 billion yen for the year to March 2012, half what it made last year and far below the consensus 360 billion yen.

The maker of the popular Civic and Accord models had been preparing to ramp up overall car production to 125 percent of pre-quake plans in the October-March second half to build up inventory that had fallen after the March 11 disaster.